Some mental health problems of adolescence and adulthood, e.g. those associated with antisocial behaviors and deficient social skills, are likely to originate in childhood. This underscores the need for longitudinal research on early developmental course. Young monozygotic (MZ) and dizygotic (DZ) same-sex twins (200 pairs each) were used here to estimate genetic and environmental influences on early externalizing problems (aggressive, antisocial behavior) and internalizing problems (anxiety, depressed mood) that could result in long-term risk. This research is part of a larger longitudinal, multi-method investigation where children are assessed at multiple time points, from infancy to 7 years. This year's report focuses on (continuity and change in behavior problems between the ages of 5 and 7 years; genetic and environmental influences; and dispositional characteristics during the preschool years that may be early signs of later problems. Mothers, fathers, and teachers independently reported higher levels of externalizing problems (attention problems, hostility and antisocial behavior) for boys than girls, but there were no sex differences in internalizing problems (anxiety/depressed mood). All types of problems showed significant continuity over time according to mother, father and teacher reports. Externalizing problems, but not internalizing problems could be traced to observations of these children when they were preschool age. They showed lowered frustration tolerance and concentration problems. Genetic influences appeared to be stronger for boys than girls. Long term outcomes will depend also on socialization experiences, as indicated by environmental influences identified.